FLINT Corp. (“FLINT” or the "Company") (TSX: FLNT) today announced
its results for the three and six months ended June 30, 2024. All
amounts are in Canadian dollars and expressed in thousands of
dollars unless otherwise noted.
“EBITDAS” and “Adjusted EBITDAS” are not
standard measures under IFRS. Please refer to the Advisory
regarding Non-GAAP Financial Measures at the end of this press
release for a description of these items and limitations of their
use.
“Activity levels continued to pick up in the
second quarter with revenue 12.8% higher than the first quarter.
Adjusted EBITDAS in the second quarter increased by 5.2% from the
same period last year. We anticipate continued growth in the second
half of the year as we prepare for an active fall turnaround
season. Our ongoing safety performance, combined with the delivery
of contracts on time and budget will continue to contribute to our
ongoing growth,” said Barry Card, Chief Executive Officer.
“We continue to execute our organic growth
strategy that targets both industrial end market and geographic
diversification. During the second quarter, we fully mobilized to
all of our new worksites across Canada with key customers. We
continue to realize the benefits from additional investments that
we made in our business development team earlier in the year with
the booking of new contract awards and renewals during the first
half of the year that are estimated to generate approximately $267
million in backlog,” added Mr. Card.
SECOND QUARTER HIGHLIGHTS
- Revenue for the
three months ended June 30, 2024 was $164.9 million,
representing a decrease of $3.6 million or 2.2% from the same
period in 2023 and an increase of $18.7 million or 12.8% from the
first quarter of 2024.
- Gross profit for
the three months ended June 30, 2024 was $18.0 million,
representing an increase of $0.7 million or 4.2% from the same
period in 2023 and an increase of $5.0 million or 38.2% from the
first quarter of 2024.
- Gross profit
margin for the three months ended June 30, 2024 was 10.9%, as
compared to 10.2% in the same period in 2023 and 8.9% in the first
quarter of 2024.
- Adjusted EBITDAS
for the three months ended June 30, 2024 was $8.3 million,
representing an increase of $0.4 million or 5.2% from the same
period in 2023 and an increase of $5.1 million or 160.5% from the
first quarter of 2024.
- Adjusted EBITDAS
margin was 5.0% for the three months ended June 30, 2024
representing an increase of 0.3% from the same period in 2023 and
an increase of 2.9% from the first quarter of 2024.
- Selling, general
and administrative ("SG&A") expenses for the three months ended
June 30, 2024 were $10.2 million, representing an increase of $0.6
million or 6.4% from the same period in 2023 and an increase of
$0.1 million or 1.2% from the first quarter of 2024. As a
percentage of revenue, SG&A expenses for the three months ended
June 30, 2024 was 6.2%, as compared to 5.7% in the same period in
2023 and 6.9% in the first quarter of 2024.
- Liquidity,
including cash and available credit facilities, was $41.7 million
at June 30, 2024, as compared to $41.1 million at
June 30, 2023.
- New contract
awards and renewals totaled approximately $65.5 million for
the three months ended June 30, 2024 and $6.3 million for the
first three weeks of July. Approximately 95% of the work is
expected to be completed in 2024.
SECOND QUARTER FINANCIAL RESULTS
($ thousands, except per share amounts) |
Three months ended June 30, |
Six months ended June 30, |
2024 |
|
2023 |
|
% Change |
2024 |
|
2023 |
|
% Change |
|
|
|
|
|
|
|
Revenue ($) |
164,922 |
|
168,567 |
|
(2.2) |
|
311,185 |
|
319,046 |
|
(2.5) |
|
|
|
|
|
|
|
|
Gross Profit ($) |
17,978 |
|
17,260 |
|
4.2 |
|
30,988 |
|
30,628 |
|
1.2 |
|
Gross Profit Margin (%) |
10.9 |
|
10.2 |
|
0.7 |
|
10.0 |
|
9.6 |
|
0.4 |
|
|
|
|
|
|
|
|
Adjusted EBITDAS (1) |
8,305 |
|
7,894 |
|
5.2 |
|
11,493 |
|
13,338 |
|
(13.8) |
|
Adjusted EBITDAS Margin
(%) |
5.0 |
|
4.7 |
|
0.3 |
|
3.7 |
|
4.2 |
|
(0.5) |
|
|
|
|
|
|
|
|
SG&A ($) |
10,181 |
|
9,572 |
|
6.4 |
|
20,237 |
|
17,740 |
|
14.1 |
|
SG&A Margin (%) |
6.2 |
|
5.7 |
|
0.5 |
|
6.5 |
|
5.6 |
|
0.9 |
|
|
|
|
|
|
|
|
Net loss from continuing
operations ($) |
(588) |
|
(12,103) |
|
(95.1) |
|
(5,374) |
|
(15,428) |
|
(65.2) |
|
Net loss ($) |
(606) |
|
(12,107) |
|
(95.0) |
|
(5,618) |
|
(15,432) |
|
(63.6) |
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
|
|
|
|
|
Net loss per share from
continuing operations ($) |
0.00 |
|
(0.11) |
|
(104.2) |
|
(0.05) |
|
(0.14) |
|
(64.3) |
|
Net
loss per share ($) |
0.00 |
|
(0.11) |
|
(104.1) |
|
(0.05) |
|
(0.14) |
|
(64.3) |
|
(1) EBITDAS and Adjusted EBITDAS are not standard measures under
IFRS and they are defined in the section "Advisory regarding
Non-GAAP Financial Measures"
Revenue for the three and six months ended June
30, 2024 was $164,922 and $311,185 compared to $168,567 and
$319,046 for the same periods in 2023, representing a decrease of
2.2% and 2.5%. The decrease in revenue was primarily due to timing
of maintenance and construction work compared to the same period in
2023, partially offset by the increase in revenues coming from
environmental services as those services continue to grow.
Gross profit for the three and six months ended
June 30, 2024 was $17,978 and $30,988 compared to $17,260 and
$30,628 for the same periods in 2023, representing an increase of
4.2% and 1.2%. Gross profit margin for three and six months ended
June 30, 2024 was 10.9% and 10.0%, compared 10.2% and 9.6% to for
the same periods in 2023. The increase in gross profit and gross
profit margin was primarily due to the mix of work compared to the
same period of 2023.
SG&A expenses for the three and six months
ended June 30, 2024 were $10,181 and $20,237, in comparison to
$9,572 and $17,740 for the same periods in 2023, representing an
increase of 6.4% and 14.1%. As a percentage of revenue, SG&A
expenses for the three and six months ended June 30, 2024 were 6.2%
and 6.5% compared to 5.7% and 5.6% for the same periods in 2023.
The increase in SG&A expenses, both on an absolute basis and as
a percentage of revenue is primarily due to higher personnel costs
to support the Company's organic growth strategy and increased
professional fees to assist in the ongoing continuous improvements
in the business post the implementation of the Company's enterprise
resource planning system.
For the three and six months ended June 30,
2024, Adjusted EBITDAS was $8,305 and $11,493 compared to $7,894
and $13,338 for the same periods in 2023. As a percentage of
revenue, Adjusted EBITDAS was 5.0% and 3.7% for the three and six
months ended June 30, 2024 compared to 4.7% and 4.2% for the same
periods in 2023.
Loss from continuing operations for the three
and six months ended June 30, 2024 was $588 and $5,374 in
comparison to a loss of $12,103 and $15,428 for the same periods in
2023. The loss variance was driven by the impairment of intangible
assets, goodwill and property, plant and equipment ("PP&E")
recognized in the second quarter of 2023.
CORPORATE UPDATES
On July 2, 2024, Kent Chicilo was appointed
Senior Vice President, Legal. Mr. Chicilo has over 22 years of
legal experience and has held senior in-house legal and functional
management roles at publicly traded companies. Prior to joining
FLINT, Mr. Chicilo was an officer of Tidewater Midstream and
Infrastructure Ltd. holding the positions of Executive Vice
President, Shared Services, Chief Legal Officer and Corporate
Secretary. Mr. Chicilo holds Bachelor of Laws and Bachelor of
Commerce degrees from the University of Saskatchewan.
Mr. Chicilo succeeded Murray Desrosiers, Senior
Vice President, Legal and Corporate Development, who retired on
July 19, 2024. Mr. Desrosiers joined FLINT in July 2019 and was a
key member of the Executive Leadership Team. We wish to
congratulate Murray on a successful legal career that spanned 29
years and wish him the best in retirement.
The annual and special meeting of holders of
common shares of the Corporation was held on June 25, 2024. At the
meeting, shareholders approved the election of Sean McMaster, Barry
Card, H. Fraser Clarke, Katrisha Gibson, Karl Johannson and Dean
MacDonald as directors and the appointment of Ernst & Young LLP
as auditors and ratified an amendment of the by-laws to reduce the
quorum requirement for shareholder meetings to two persons present
in person or by proxy at the meeting and holding shares
representing 15% (rather than 25%) of the votes entitled to be cast
at the meeting.
The Company would like to acknowledge the
significant contributions of Mr. Jordan Bitove who did not stand
for re-election at the meeting. Mr. Bitove has served as a director
of the Company since 2013. The Company would like to thank Mr.
Bitove for the guidance he has provided over the past 11 years.
LIQUIDITY AND CAPITAL
RESOURCES
On May 31, 2024, FLINT extended the maturity
dates of (a) the ABL Facility to April 14, 2027 (previously April
14, 2025), (b) the Term Loan Facility to the earlier of (i) the
date that is 180 days following the maturity of the ABL Facility
and (ii) October 14, 2027 (previously October 14, 2025), and (c)
the Senior Secured Debentures to October 14, 2027 (previously March
23, 2026).
FLINT has an asset-based revolving credit
facility (the “ABL Facility”) providing for maximum borrowings of
up to $50.0 million with a Canadian chartered bank. The amount
available under the ABL Facility will vary from time to time based
on the borrowing base determined with reference to the accounts
receivable of FLINT and certain of its subsidiaries. The maturity
date of the ABL Facility is April 14, 2027.
The Company anticipates that its liquidity (cash
on hand and available credit facilities) and cash flow from
operations will be sufficient to meet its short-term contractual
obligations. To maintain compliance with its financial covenants
through June 30, 2025, the Company has the ability to pay interest
on the Senior Secured Debentures in kind, which requires approval
by the holder of the Senior Secured Debentures at its sole
discretion
As at June 30, 2024, the issued and
outstanding share capital included 110,001,239 Common Shares,
127,732 Series 1 Preferred Shares, and 40,111 Series 2 Preferred
Shares.
The Series 1 Preferred Shares (having an
aggregate value of $127.732 million) are convertible at the option
of the holder into Common Shares at a price of $0.35/share and the
Series 2 Preferred Shares (having an aggregate value of $40.111
million) are convertible into Common Shares at a price of
$0.10/share.
The Series 1 and Series 2 Preferred Shares have
a 10% fixed cumulative preferential cash dividend payable when the
Company has sufficient monies to be able to do so, including under
the provisions of applicable law and contracts affecting the
Company. The Board of Directors of the Company does not intend to
declare or pay any cash dividends until the Company's balance sheet
and liquidity position supports the payment. As at June 30,
2024, the accrued and unpaid dividends on the Series 1 and Series 2
shares totaled $101.8 million. Any accrued and unpaid dividends are
convertible in certain circumstances at the option of the holder
into additional Series 1 and Series 2 Preferred Shares.
On June 30, 2024, Canso, in its capacity as
portfolio manager for and on behalf of certain accounts that it
manages and sole holder of the Senior Secured Debentures, agreed to
accept the issuance of Senior Secured Debentures on June 30, 2024
with a principal amount of $5,205 in order to satisfy the interest
that would otherwise become due and payable on such date.
OUTLOOK
We continue to execute our organic growth
strategy that targets both industrial end market and geographic
diversification. We are seeing the results of this strategy with
renewed and expanded scopes with existing customers and the
addition of new customers. We anticipate continued growth in the
second half of 2024 as we prepare for an active fall turnaround
season.
For our customers in the energy industry, the
dichotomy between oil and natural gas pricing continues. The
start-up of Trans Mountain Pipeline expansion in the second quarter
has provided support for Canadian oil prices, which remained strong
throughout the first half of the year. While natural gas prices
remain weak, the expected start-up of LNG Canada in 2025 is
providing some optimism as it will open up new markets for Canadian
natural gas. While these customers continue to prioritize debt
repayment and returns to shareholders, they are starting to
increase spending on both maintenance projects (to increase
operational reliability) and capital projects (to maintain or
expand production capacity). For the second half of 2024, we see
commodity prices at a level that supports continued modest growth
for our business.
The market for skilled labour in Canada remains
tight. We remain focused on our programs to attract, retain and
develop our people and to deliver high quality services to our
valued customers in a safe and efficient manner.
FLINT has a suite of more than 40 service
offerings that encompass the full asset lifecycle. Through the
extensive regional coverage provided by our 19 operating
facilities, we believe that FLINT is well-positioned to further
consolidate the services required at various operating sites while
generating efficiencies and cost reductions for our customers. We
are also continually working to improve our service delivery to
help our customers bring their resources to our world.
ADDITIONAL INFORMATION
Our unaudited condensed interim financial
statements for the three and six months ended June 30, 2024 and the
related Management's Discussion and Analysis of the operating and
financial results can be accessed on our website at
www.flintcorp.com and will be available shortly through SEDAR
at www.sedarplus.ca.
About FLINT Corp.
With a legacy of excellence and experience
stretching back more than 100 years, FLINT provides solutions for
the Energy and Industrial markets including: Oil & Gas
(upstream, midstream and downstream), Petrochemical, Mining, Power,
Agriculture, Forestry, Infrastructure and Water Treatment. With
offices strategically located across Canada and a dedicated
workforce, we provide maintenance, construction, wear technology
and environmental services that help our customers bring their
resources to our world. For more information about FLINT, please
visit www.flintcorp.com or contact:
Barry
Card |
|
Jennifer
Stubbs |
Chief Executive Officer |
|
Chief Financial Officer |
FLINT Corp. |
|
FLINT Corp. |
(587) 318-0997 |
|
|
investorrelations@flintcorp.com |
|
|
Advisory regarding Forward-Looking
Information
Certain information included in this press
release may constitute “forward-looking information” within the
meaning of Canadian securities laws. In some cases, forward-looking
information can be identified by terminology such as “may”, “will”,
“should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”,
“predict”, “potential”, “continue” or the negative of these terms
or other similar expressions concerning matters that are not
historical facts. Specifically, this press release contains
forward-looking information relating to: our business plans,
strategies and objectives; contract renewals and project awards,
including the estimated value thereof and the timing of completing
the associated work; the sufficiency of our liquidity and cash flow
from operations to meet our short-term contractual obligations and
maintain compliance with our financial covenants through June 30,
2025; the payment of interest owing on the Senior Secured
Debentures in kind; our dividend policy; the outlook for oil and
natural gas prices and their impact on the demand for our services;
the spending plans of our customers in the energy industry; that we
expect continued modest growth for our business in 2024; the market
for skilled labour in Canada; our ability to generate efficiencies
and cost reductions for our customers; and our Outlook including
our anticipated continued growth in the second half of 2024; the
expected start-up of LNG Canada in 2025 providing some optimism as
it will open up new markets for Canadian natural gas; our customers
starting to increase spending on both maintenance projects (to
increase operational reliability) and capital projects (to maintain
or expand production capacity); and our view that in 2024 commodity
prices will be at a level that supports continued modest growth for
our business.
Forward-looking information involves significant
risks and uncertainties. A number of factors could cause actual
events or results to differ materially from the events and results
discussed in the forward-looking information including, but not
limited to, compliance with debt covenants, access to credit
facilities and other sources of capital for working capital
requirements and capital expenditure needs, availability of labour,
dependence on key personnel, economic conditions, commodity prices,
interest rates, regulatory change, weather and risks related to the
integration of acquired businesses. These factors should not be
considered exhaustive. Risks and uncertainties about FLINT’s
business are more fully discussed in FLINT’s disclosure materials,
including its annual information form and management’s discussion
and analysis of the operating and financial results, filed with the
securities regulatory authorities in Canada and available on SEDAR+
at www.sedarplus.ca. In formulating the forward-looking
information, management has assumed that business and economic
conditions affecting FLINT will continue substantially in the
ordinary course, including, without limitation, with respect to
general levels of economic activity, regulations, taxes and
interest rates. Although the forward-looking information is based
on what management of FLINT consider to be reasonable assumptions
based on information currently available to it, there can be no
assurance that actual events or results will be consistent with
this forward-looking information, and management’s assumptions may
prove to be incorrect.
This forward-looking information is made as of
the date of this press release, and FLINT does not assume any
obligation to update or revise it to reflect new events or
circumstances except as required by law. Undue reliance should not
be placed on forward-looking information. Forward-looking
information is provided for the purpose of providing information
about management's current expectations and plans relating to the
future. Readers are cautioned that such information may not be
appropriate for other purposes.
Advisory regarding Non-GAAP Financial
Measures
The terms ‘‘EBITDAS’’ and “Adjusted EBITDAS”
(collectively, the ‘‘Non-GAAP Financial Measures’’) are financial
measures used in this press release that are not standard measures
under IFRS. FLINT’s method of calculating the Non-GAAP Financial
Measures may differ from the methods used by other issuers.
Therefore, the Non-GAAP Financial Measures, as presented, may not
be comparable to similar measures presented by other issuers.
EBITDAS refers to income (loss) from continuing
operations in accordance with IFRS, before depreciation and
amortization, interest expense, income tax expense (recovery) and
long-term incentive plan expenses. EBITDAS is used by management
and the directors of FLINT as well as many investors to determine
the ability of an issuer to generate cash from operations.
Management believes that in addition to income (loss) from
continuing operations and cash provided by operating activities,
EBITDAS is a useful supplemental measure from which to determine
FLINT’s ability to generate cash available for debt service,
working capital, capital expenditures and income taxes. FLINT has
provided a reconciliation of income (loss) from continuing
operations to EBITDAS below.
Adjusted EBITDAS refers to EBITDAS excluding
impairment of assets, restructuring expense, gain on sale of
property, plant and equipment, loss (recovery) of contingent
consideration liability, other income and one time incurred
expenses. FLINT has used Adjusted EBITDAS as the basis for the
analysis of its past operating financial performance. Adjusted
EBITDAS is a measure that management believes (i) is a useful
supplemental measure from which to determine FLINT’s ability to
generate cash available for debt service, working capital, capital
expenditures, and income taxes, and (ii) facilitates the
comparability of the results of historical periods and the analysis
of its operating financial performance which may be useful to
investors. FLINT has provided a reconciliation of income (loss)
from continuing operations to Adjusted EBITDAS below.
Investors are cautioned that the Non-GAAP
Financial Measures are not alternatives to measures under IFRS and
should not, on their own, be construed as an indicator of
performance or cash flows, a measure of liquidity or as a measure
of actual return on the shares. These Non-GAAP Financial Measures
should only be used with reference to FLINT’s consolidated interim
and annual financial statements, which are available on SEDAR+ at
www.sedarplus.ca or on FLINT’s website at www.flintcorp.com.
(In thousands of Canadian dollars) |
Three months ended June 30, |
Six months ended June 30, |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
Loss from continuing operations |
(588) |
|
(12,103) |
|
(5,374) |
|
(15,428) |
|
Add: |
|
|
|
|
Amortization of intangible
assets |
67 |
|
130 |
|
135 |
|
262 |
|
Depreciation expense |
2,715 |
|
2,580 |
|
5,332 |
|
5,176 |
|
Long-term incentive plan
expense |
775 |
|
1,050 |
|
1,375 |
|
2,045 |
|
Interest expense |
4,733 |
|
4,654 |
|
9,315 |
|
9,010 |
|
EBITDAS |
7,702 |
|
(3,689) |
|
10,783 |
|
1,065 |
|
Add (deduct): |
|
|
|
|
Gain on sale of property,
plant and equipment |
(274) |
|
(68) |
|
(443) |
|
(190) |
|
Impairment of goodwill and
intangible assets |
— |
|
7,289 |
|
— |
|
7,289 |
|
Impairment of property, plant
and equipment |
— |
|
4,173 |
|
— |
|
4,173 |
|
Restructuring expenses |
581 |
|
171 |
|
976 |
|
778 |
|
Other income |
(106) |
|
(110) |
|
(421) |
|
(110) |
|
One-time incurred
expenses |
402 |
|
128 |
|
598 |
|
333 |
|
Adjusted EBITDAS |
8,305 |
|
7,894 |
|
11,493 |
|
13,338 |
|
Flint (TSX:FLNT)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
Flint (TSX:FLNT)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024